Is There a Bond Bubble Ready to Burst?

With the slide in stocks, investors have been pouring into bonds as a safety measure, causing some to question if there's a bond 'bubble.'

Whether bonds are over-priced and over-owned were the topics of several discussions this week on CNBC, with guests on both sides of the issue.

On Friday, Tony Crescenzi, a senior vp and portfolio manager at PIMCO, which runs the world's largest bond fund, said he didn't see a bubble and that bonds were a good investment.

"We think interest rates will remain low for sometime as will inflation," said Crescenzi, who is also a contributor. "If you think about it, Treasurys are a good insurance against the storm that's hit equities we've seen now and in the past."

However, University of Pennsylvania professor Jeremy Siegel disagreed saying bonds were not providing good enough returns and that a bubble is growing.

"If you look at data on returns bond investors get, we are way below what are historical returns on bonds," said Siegel. "If you buy a long term bond, you have to worry about getting a positive return. I think interest rates and yields are going to go up."

On Wednesday, PIMCO found and co-CIO Bill Gross said that a bond bubble would depend on the rate of inflation.

"If we have a deflationary or even a low inflationary black hole that persists for years to come, then we don't have a bond bubble," Gross said. "However, income from the Treasury market is low and real interest rates are negative so investors should look elsewhere to get more bang for their buck."

Gross did say moving into bonds is a natural reaction to the economy's up and downs. He sad that PIMCO received a $100 billion inflow of investments into bonds over the last five months.

Another voice saying there was no bond bubble was Robert Kessler founder and CEO of the Kessler Companies, a firm that focuses on Treasurys.

"You don't have a bond bubble, you have a bull market. You have the Japanese and very large buyers including the Federal Reserve buying Treasurys," said Kessler. "It's rare to have any kind of bubble on something that's guaranteed to pay you back at a certain rate at a certain time."

But there was a more cautious note to Kessler's statements from Alison Deans, of Varick Asset Management and a CNBC contributor.

"You won't suffer huge losses buying Treasurys, but you risk losing spending power if you invest so much in bonds," Deans said. "The value of your money will go down if the economy improves and I think it will. I think diversification is best between stocks and bonds. It's a case of not putting all your eggs in one basket."